Sunday, July 07, 2002
I-71 land rush for retailers
East-side corridor hot new area of development
By Ken Alltucker email@example.com
The Cincinnati Enquirer
A new market is emerging in Cincinnati along Interstate 71 that apparel, big-box and specialty retailers all are rushing to tap.
The latest evidence is the recent debut of the $65 million Center of Cincinnati shopping center at the former Milacron factory site in Oakley. Sam's Club recently opened, Target plans to open July 28, followed by Meijer in spring of 2003.
Three major stores have committed to opening in the new shopping center.|
(Glenn Hartong photos)
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The center gives city residents new shopping choices near home, options once available to many only by long car trips on freeways to suburbs ringing the city.
It's part of a nationwide trend of retailers bringing new stores to older, established neighborhoods as well as new suburbs.
Typically, (big-box retailers) have always gone outside the ring of the city because it was difficult to find sites, said Steve Brandt, owner of Cincinnati-based Brandt Retail Group.
With the launch of successful projects just outside downtown, more and more developers are looking for slivers of land that can support shopping and office complexes.
Center of Cincinnati developer Vandercar Holdings Inc. isn't satisfied with just a few big box stores at Marburg and Interstate 71. The developer has also purchased some homes in the blocks surrounding the former factory.
Vandercar declined to reveal expansion plans, but it has discussed a much more expensive project with Cincinnati city officials that would marry retail, office and residential uses.
The site of the Center of Cincinnati shopping center was bare a year ago this view is to the south along Interstate 71.|
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It would make Center of Cincinnati the city's most ambitious development other than the riverfront.
Typically, you don't have the massive land available near the right demographic mix, said Chuck Thomas, a commercial real estate broker who has worked for Vandercar.
Mr. Thomas also declined to say how much more property Vandercar plans to acquire, but a bank will open on the existing 38-acre site. There's also room for two restaurants, though no leases have been signed, Mr. Thomas said.
The Center of Cincinnati and the two Rookwood projects in Norwood have triggered a frenzy to build office or retail projects along Interstate 71.
The Rookwood projects fetched top dollar for Anderson Real Estate and lured several new-to-market retailers to Greater Cincinnati. Even the large office that Anderson was initially reluctant to tackle proved highly successful, commanding pricey rents and quickly filling with an assortment of financial firms.
Now, other developers are diligently searching for sites along I-71 near the city. At least a half-dozen office buildings are planned along the interstate between Silverton and downtown.
That area is ripe for office development, said Jay DeWitt, an office specialist with Colliers International.
As developers follow the formula established by Vandercar and Anderson, they are discovering that newer projects are becoming expensive. While urban pioneers are rewarded handsomely with big profits, followers tend to pay a premium as the sites become more popular.
The two projects that appear closest to starting construction are in Norwood: the Cornerstone of Norwood across from Rookwood, and a former General Motors lot at Montgomery Road and the Norwood Lateral.
The $30 million Cornerstone project, wedged on a 5-acre site, will be one of the most expensive and dense office-retail projects outside downtown.
The developer paid lofty sums for 17 modest homes and four run-down apartment buildings along I-71. The project will include a five-story office building, three-level retail building, restaurant and parking garage.
Cornerstone developer Ackermann Group has said it could start construction this summer or fall, but the project likely will depend on its ability to lure shops or other businesses.
Al Neyer Inc. is in the final planning stages of a project expected to bring two medical buildings, an office building and grocery store to the former GM site.
Kroger might build a grocery store there, and the Mayfield Clinic & Spine Institute is considering the project, too.
Al Neyer's Ken Schon said lenders will scrutinize any new office projects because a struggling economy and building boom have created a lot of available office space.
I don't think we'll do anything too speculative, Mr. Schon said, adding that banks now expect developers to find tenants for 50 to 60 percent of new office space before construction starts.
Yet Mr. Schon still thinks that easy access to his Norwood site will entice businesses to move there.
The emergence of the I-71 corridor appeals to businesses that want to be near downtown but don't want to hassle with parking.
Large chain retailers have discovered the growth is not in the suburbs anymore, Mr. Schon said.
The malls and traditional downtowns don't work as well anymore, Mr. Schon said.
Even Anderson Real Estate wants to build a third phase of its Rookwood project, but faces a difficult challenge because of its earlier successes. It wants to acquire 77 homes and several commercial businesses for the expansions, but property owners have made it clear they expect lucrative offers for their homes.
Mr. Thomas predicted that not all developers will find success.
He said high office vacancy rates will prompt some to delay or kill projects. Also, locating west of I-71 can be harmful, he said.
One side of the highway versus the other could be the difference between success and failure, he said.
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